NZD/USD bears need a break of 0.7130

Currently, NZD/USD is trading at 0.7153, down -0.09% on the day, having posted a daily high at 0.7162 and low at 0.7154.

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NZD/USD has stabilised after being the only real show overnight when the pair dropped to test a key support area at 0.7150. Some of the falls were due to a disappointing GDT dairy auction result with the price index contracting by 2.4%, the pair lost its footing and turned south. The move was held up, however, in a weak US dollar climate and lower US yields and ahead of the 0.7130 end-Aug low. "Uncertainty around dairy prices and the election, as well as a USD recovery, are weighing," noted analysts at Westpac.

NZD/USD 1-3 month:  

Meanwhile, the analysts at Westpac explained that if the RBNZ remains firmly on hold, as they expect, and the US dollar rises on tighter Fed policy, then NZD/USD could fall as far as 0.70 by year-end. "Pre-election jitters may also weigh on the NZD."

NZD/USD levels

To the downside, closes below 0.7150 opens 0.7127 as the June 6th low. 0.7100 is the key psychological level. 0.7055 comes next as the June 1st low and then 0.7000. The upside level at 0.7240 is a major hurdle of which a break of could open doors towards  0.7315.  0.7370 (the 9th Aug high) is the next key hurdle on the upside. A break there would solidify a bullish trend back towards 0.7522 and the YTD highs so long as there are closes on the 0.74 handle and beyond the post FOMC kneejerk highs of 0.7434. 

FX markets were confined to narrow ranges - ANZ